Hollande balks at Alstom deal, but GE persist

Published 12:15 am, Wednesday, May 7, 2014

France's President Francois Hollande, center, gestures as he talks to the media after an interview with BFM television journalist in Paris, Tuesday, May 6, 2014. (AP Photo/Thibault Camus, Pool)

France's President Francois Hollande, center, gestures as he talks to the media after an interview with BFM television journalist in Paris, Tuesday, May 6, 2014. (AP Photo/Thibault Camus, Pool)

Photo: Thibault Camus, Associated Press

Hollande balks at Alstom deal, but GE persist

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French President Francois Hollande has criticized General Electric's proposed $16.9 billion purchase of Alstom's power division, but the Connecticut company says it plans to pursue its options.

In a statement, Fairfield-based GE said Tuesday that it believes the deal would benefit everyone involved in the proposal.

"We appreciate the engagement of the French government," GE said. "We believe our proposal is good for France, for Alstom and for GE. As our letter to President Hollande stressed, we are open to continuing dialogue."

In a radio interview in France, Hollande said he is concerned about the impact on employment at the giant France-based international power and transport conglomerate. The company employs 18,000 in France.

The cool response by Hollande could provide a greater opportunity for a bid by Germany-based Siemens, one of GE's major competitors. When GE and Alstom announced a tentative deal last week, the French company left the door open for other bids.

During the radio interview, Hollande reminded listeners there was another offer (from Siemens), and "we'll see if it is a better one," he told Bloomberg News.

The French government criticized the secretive methods employed by GE and Alstom in negotiating their deal, contending the parties should have kept the government more informed. In 2004, France joined with banks to fund a 4.4 billion euro bailout of Alstom.

A deal between GE and Alstom could be closed in 2015, according to reports.

After an April 28 meeting between Hollande and GE chief Jeff Immelt, Hollande said that his biggest concerns were jobs and the location of operations, Bloomberg reported.

GE's proposal involves Alstom's units that make steam, gas, hydro and wind turbines and energy grid products, according to Bloomberg, but it does not include Alstom's transport unit, which makes trains, metros, tramways and signaling systems, representing less than 30 percent of sales.

"The prerequisite for this offer is, that Alstom agrees to give Siemens access to the company's data room and permission to interview the management during a period of four weeks, to enable Siemens to carry out a suitable due diligence," Siemen's said in a statement.